Growth Scenario of Non-Performing Asset in Indian Banking Sector and its Impact
- Author Chittaranjan Das
- DOI
- Country : India
- Subject : Commerce
Keywords : Advances, Loans, NPA, Public sector banks
Abstract
Indian banking industry plays an important role in the sustainable socio economic development of the country. This role is performed by banks by extending credit to several deficit sectors for their expansion and development. These credits are asset for the banks but non-payment of interest and principal of previously issued credit are known as bad loans or Non-performing assets (NPAs). NPAs reflect the performance of banks. A high level of NPAs suggests high probability of a large number of credit defaults that affect the profitability and net-worth of banks. The problem of NPAs is not only affecting the banks but also the entire economy. The Indian banking sector is facing a serious problem of NPAs. The gross non-performing advances (GNPAs) ratio increased sharply to 5.07 per cent from 2.2 per cent between March 2008 and March 2015. In the present study an attempt is made to analyze the trends and position of NPAs of public sector banks, to identify and study the reasons for occurrence of NPAs and their impact on Indian banking operations.
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